Gurgaon real estate pricing trends - 2015 Vs. 2016

Gurgaon is an important realty market of the country and remains affected by the slump that hit the country's realty sector. Sales dwindled, new launches decreased, prices came down and the overall sentiment nosedived in the year 2015. Expert Ashwinder Raj Singh believes that the real estate pricing trends in Gurgaon will begin picking up again in the years to come.

The Story So Far

Gurgaon is an important realty market of the country and especially in
the National Capital Region (NCR). Gurgaon was not unaffected by the slump that
hit the country's realty sector. Sales dwindled, new launches decreased, prices
came down and the overall sentiment nosedived in the year 2015.

The city of Gurgaon has for long been a bellwether of the rapid growth
in the country over the years due to the presence of multiple multinational
corporations. This factor has for long attracted countless expatriates and
NRIs, and resulted in Gurgaon's realty boom over the past decade-and-a-half.
However, the past couple of years have been tough for Gurgaon's real estate market.

Overall, NCR has witnessed country’s highest unsold inventory figures at
almost 1,70,000 units. Gurgaon’s contribution to this burden is only around
22,000 unsold units, but this is still uncomfortably high. Another source of
worry is that almost 30% of this unsold inventory is under construction, and
located in perfectly inhabitable sectors.

The primary reason for this scenario has been a slowing economy over the
years, as well as sky-rocketing prices. Buyers were waiting for prices to come
down, while investors who bought properties in the previous boom cycle of
2009-10 did not want to commit more money with no clear returns. With the
liquidity crisis brought on by high unsold inventories, developers began
offering freebies, discounts and all kinds of schemes to lure buyers.

The impact has been a visible and significant decline in prices by
approximately 25% over 2014. However, this has proved insufficient to catalyze
a new demand boom. In other words, while Gurgaon's realty market favoured
developers in the period 2010-12, it is now clearly a buyers' market.
Nevertheless, most buyers still see this market's prices as unattractive.

On the positive side, Gurgaon has seen the maximum number of new
launches within NCR, and that too in the affordable housing category under the
Haryana government’s Affordable Housing Policy 2013. These dwellings are priced
at under Rs. 25 lakh - which is where demand may come in over the short to
medium term. The demand for properties priced beyond Rs. 3 cr has been on a
steady decline, and projects that were launched way back in 2009-10 catering to
this premium segment constitute a large part of the unsold inventory. In fact,
some of these projects have not even been completed, thanks to the liquidity
crisis. This has resulted in new launches being down by around 30-35% on a
year-on-year basis.

Birds' Eye View Of 2016

Despite the not insignificant challenges ahead, the future of Gurgaon's
real estate market is positive and hopeful. With a projected GDP growth of
around 7.5%, once again robust economy will generate income for more and more
people and most likely boost demand. Gurgaon is the hub of the service industry
in NCR, and surrounding areas are becoming increasingly important in the
manufacturing sector. The government’s 'Make in India' initiative will ensure
more industries, and this will directly result in increased housing demand.

Secondly, the RBI's recent rate cuts will start having an impact on
bank’s lending rates somewhere by second quarter of Financial Year 2016-17,
resulting in lower home loan rates and greater demand. Also, the government’s
initiatives of easing FDI in real estate will improve liquidity, meaning that
developers will have more leg room for offering good deals to buyers. Another
important influencing factor is the Smart Cities project, for which Gurgaon is
a strong contender. Its inclusion in this scheme will be a boon for its real
estate sector.

The country's economic slowdown has toughed out, and the only way is
up. The government has woken up to the fact that the real estate sector needs
real help, and is making very favorable policy decisions. For a city like
Gurgaon that needs only a small amount of stimulus to get up and running again,
the winds of change are blowing strong. The changes will not happen overnight,
but 2016 will bring visible progress on the ground. As a result, real estate
pricing trends in Gurgaon will also begin picking up again.

Gurgaon real estate pricing trends - 2015 Vs. 2016Description:Gurgaon is an important realty market of the country and remains affected by the slump that hit the country's realty sector. Sales dwindled, new launches decreased, prices came down and the overall sentiment nosedived in the year 2015. Expert Ashwinder Raj Singh believes that the real estate pricing trends in Gurgaon will begin picking up again in the years to come.Times Now